In the fast-paced world of Human Resources (HR), staying ahead of the curve is imperative for businesses aiming to attract, retain, and develop top talent. The emergence of Generative AI has brought about transformative possibilities for the HR function. While many organizations have begun exploring this technology through pilots, hackathons, and other initiatives, it’s essential to understand how Generative AI can drive HR innovation and positively impact the entire HR landscape.
HR as an Integrated Operating Function
To comprehend the impact of Generative AI in HR, we must first acknowledge that HR, like Finance, IT, and other internal functions, serves as a design, support, and integration function within an organization. HR collaborates closely with the business and tackles multifaceted issues such as hiring, onboarding, training, leadership development, performance management, compensation, rewards, benefits, organizational design, diversity strategies, culture, and much more.
Traditionally, most of these HR functions operated somewhat independently. However, with the advent of what we now refer to as Systemic HR, organizations have recognized the need for more integrated solutions. Today’s competitive labor market, high turnover rates, workforce stress, and the imperative to reskill and upskill employees require a more cohesive approach. Furthermore, the HR landscape is inundated with a multitude of data sources—large enterprises often have more than 80 employee-facing systems. To make strategic decisions, business leaders need all this data in one integrated place, and Generative AI holds the promise of achieving this goal.
The Overwhelmed Workforce and the Role of AI
The modern workforce faces significant challenges, with a large portion of employees feeling overwhelmed (as much as 87% believe they operate at full capacity). HR’s role in this context is to simplify work, reduce the number of systems, and save employees time on administrative tasks. HR teams must continually expand their range of services while making them more user-friendly. Generative AI steps in to help alleviate these challenges by streamlining processes, improving employee experiences, and enhancing operational efficiency.
Moreover, HR is evolving into a role of creator, developer, and consultant. As highlighted in Systemic HR research, the future of HR lies in becoming more than just “support agents”; HR professionals are transforming into “consultants, product managers, designers, and advisors.” This shift reflects the core functions of Generative AI, making it a perfect solution for the myriad challenges faced by HR teams.
Real-World Use Cases
- Talent Intelligence for Recruiting, Mobility, Development, Pay Equity: Talent Intelligence, powered by Generative AI, is revolutionizing HR practices. Organizations can employ Language Model Machine (LLM)-based systems to identify hundreds of characteristics, such as skills, in their workforce. This empowers companies to source candidates intelligently, identify employees ready for promotion, facilitate internal mobility, and detect pay inequities. LLM-based systems, offered by various vendors like Eightfold, Gloat, Beamery, Seekout, Phenom, and Skyhive, enable data-driven HR practices. This domain is still emerging, with the potential to disrupt traditional Human Capital Management (HCM) players.
- Employee Experience Apps (Onboarding, Job Transition, Administration): Intelligent employee chatbots are gaining traction in HR. These chatbots consolidate documents, support materials, and transactional systems into user-friendly experiences. Organizations can customize content, ensure data security, and use orchestration tools to connect chatbots with enterprise systems. This innovation minimizes the need for numerous employee portals and simplifies tasks like onboarding, leadership transitions, and more. Vendors like OpenAI, IBM Watson Orchestrate, and HCM providers are entering this space with solutions to enhance the employee experience.
- Employee Training and Compliance Apps: Generative AI is being harnessed in employee training. Tools have emerged that can generate training content from documents, create quizzes automatically, and serve as a “teaching assistant.” These tools facilitate the generation of micro-learning content based on employee roles, team dynamics, location, and activity. By leveraging AI, organizations can enhance their learning and development initiatives, ultimately offering more personalized and efficient training programs.
- Employee Development and Growth Apps: Talent Intelligence platforms have given rise to AI-generated “career pathways.” These systems analyze employees’ skills and experiences to recommend potential career trajectories. With guidance on acquiring necessary skills and certifications, employees can explore various growth opportunities. By leveraging systems like the Eightfold Career Navigator, organizations can empower their workforce to take charge of their careers. Additionally, these platforms have the potential to benefit non-degreed workers by opening up new career possibilities.
- Performance Management and Operational Improvement: Generative AI is poised to assist in performance management and operational improvements. While it won’t replace human judgment, it can offer valuable insights. AI systems can analyze performance data across teams or individuals and identify underlying issues, such as team size, skill composition, tenure, diversity, and other factors. HR consultants can use these insights to make informed decisions and improve overall organizational performance.
- Retention, Hybrid-Work, Wellbeing, Engagement Analysis: Employee burnout, wellbeing, and engagement have become significant concerns for organizations. While surveys have traditionally been used to assess these areas, Generative AI can provide data-driven insights. AI systems can analyze factors contributing to turnover, wellbeing issues, and engagement challenges, offering a deeper understanding of the issues at hand. This data-driven approach can uncover trends and challenges that might not be apparent through traditional methods.
Getting Started with Generative AI in HR
Embarking on a Generative AI journey in HR is an exciting prospect, but it requires careful planning and execution. Here are key steps to get started:
- Identify the Problem: Instead of chasing the technology, focus on identifying the HR challenges you want to address. Prioritize areas such as employee onboarding, self-service, hourly worker scheduling, or any other specific concern.
- Involve IT: Collaborate with your IT team to address data quality, data management, security, business rules, and confidentiality. AI implementations require a robust IT infrastructure and data governance.
- Continuous Improvement: Understand that Generative AI systems require ongoing maintenance. “Prompt Engineering” is necessary to fine-tune the system, identify data gaps, and ensure a user-friendly experience.
- The Evolving Role of HR: As AI takes over routine tasks, HR professionals will shift into roles focusing on data analysis, AI system management, training, and improving the user experience. New career paths and opportunities will emerge within HR teams to support and optimize AI systems.
Generative AI has the potential to revolutionize the HR function, making it more data-driven, efficient, and employee-centric. While it won’t replace HR professionals, it will empower them to make better decisions, deliver a superior employee experience, and drive business success. As organizations continue to embrace this transformative technology, the HR landscape is poised for a significant evolution.